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New Guidance on Non-Disclosure Agreements

on Friday, 21 February 2020.

ACAS has published new guidance to help employers and workers understand what NDAs are and to discourage their misuse.

This new guidance follows recent media coverage around the use of non-disclosure agreements (NDAs) in cases that involve workplace sexual harassment or discrimination. We summarise some of the key points below.

What Is an NDA?

Typically employers might use NDAs to stop an employee or worker sharing information. An NDA can also be known as a 'confidentiality clause'.

There are several reasons why an employer and employee or worker may use an NDA, including:

  • when someone starts a new job, to protect company secrets
  • after a dispute, to keep details confidential

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When Not to Use an NDA

NDAs cannot be used to stop anyone whistleblowing or reporting a crime to the police.

ACAS also recommends that NDAs should not be used in the following instances:

  • before seeing if another resolution can be used
  • when an NDA is not necessary
  • to stop someone reporting harassment, discrimination or sexual harassment
  • to cover up inappropriate behaviour or misconduct, particularly if there's a risk of it happening again
  • to avoid addressing disputes or problems in the workplace
  • to mislead someone

Employers should also consider whether an NDA is the appropriate course of action and review each matter on a case-by-case basis. For example, an NDA may not be necessary where information is protected from disclosure to the public domain by data protection law.

When Can You Use an NDA?

NDAs are commonly used where an employer and employee enter into an agreement to resolve a dispute in the workplace. They might use an NDA to keep the details of the agreement or the fact that an agreement had been made confidential.

NDAs can also be used in one of the following circumstances:

  • to keep an organisation's information confidential
  • when an employer needs protection for important business information
  • to keep certain things that the employee knows about the workplace or business confidential
  • to prevent an employee making derogatory statements about the employer or other employees

Practical Impact

The government has indicated its intention to legislate in this area, particularly to tackle the misuse of NDAs in the workplace to cover up sexual harassment, discrimination and assault. We will keep you updated with developments. However, employers are well advised to ensure their current use of NDAs complies with best practice.

For specialist legal advice on non-disclosure agreements, please contact Ellie Boyd in our Employment Law team on 020 7665 0940, or complete the form below.

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